diff --git a/tests/legacy-cli/e2e/assets/8.0-project/tsconfig.spec.json b/tests/legacy-cli/e2e/assets/8.0-project/tsconfig.spec.json
index 6400fde7d544..04463b7811d2 100644
--- a/tests/legacy-cli/e2e/assets/8.0-project/tsconfig.spec.json
+++ b/tests/legacy-cli/e2e/assets/8.0-project/tsconfig.spec.json
@@ -3,8 +3,7 @@
   "compilerOptions": {
     "outDir": "./out-tsc/spec",
     "types": [
-      "jasmine",
-      "node"
+      "jasmine"
     ]
   },
   "files": [
diff --git a/tests/legacy-cli/e2e/setup/500-create-project.ts b/tests/legacy-cli/e2e/setup/500-create-project.ts
index d348368dc819..049f80368d7c 100644
--- a/tests/legacy-cli/e2e/setup/500-create-project.ts
+++ b/tests/legacy-cli/e2e/setup/500-create-project.ts
@@ -2,6 +2,7 @@ import { join } from 'path';
 import { getGlobalVariable } from '../utils/env';
 import { expectFileToExist, writeFile } from '../utils/fs';
 import { gitClean } from '../utils/git';
+import { setRegistry as setNPMConfigRegistry } from '../utils/packages';
 import { ng, npm } from '../utils/process';
 import { prepareProjectForE2e, updateJsonFile } from '../utils/project';
 
@@ -21,14 +22,7 @@ export default async function() {
     const isCI = getGlobalVariable('ci');
 
     // Ensure local test registry is used when outside a project
-    if (isCI) {
-      // Safe to set a user configuration on CI
-      await npm('config', 'set', 'registry', testRegistry);
-    } else {
-      // Yarn does not use the environment variable so an .npmrc file is also required
-      await writeFile('.npmrc', `registry=${testRegistry}`);
-      process.env['NPM_CONFIG_REGISTRY'] = testRegistry;
-    }
+    await setNPMConfigRegistry(true);
 
     await ng('new', 'test-project', '--skip-install', ...extraArgs);
     await expectFileToExist(join(process.cwd(), 'test-project'));
diff --git a/tests/legacy-cli/e2e/tests/update/update-8.ts b/tests/legacy-cli/e2e/tests/update/update-8.ts
index 91023429de55..7f2f2f619584 100644
--- a/tests/legacy-cli/e2e/tests/update/update-8.ts
+++ b/tests/legacy-cli/e2e/tests/update/update-8.ts
@@ -1,23 +1,47 @@
 import { createProjectFromAsset } from '../../utils/assets';
-import { expectFileMatchToExist } from '../../utils/fs';
-import { installWorkspacePackages } from '../../utils/packages';
-import { ng, noSilentNg, silentNpm } from '../../utils/process';
+import { getGlobalVariable } from '../../utils/env';
+import { expectFileMatchToExist, rimraf, writeFile } from '../../utils/fs';
+import { installWorkspacePackages, setRegistry } from '../../utils/packages';
+import { ng, noSilentNg } from '../../utils/process';
 import { isPrereleaseCli, useBuiltPackages, useCIChrome, useCIDefaults } from '../../utils/project';
 
-export default async function() {
-  await createProjectFromAsset('8.0-project');
-  await ng('update', '@angular/cli', '--migrate-only', '--from=8');
+export default async function () {
+  await createProjectFromAsset('8.0-project', true, true);
+
+  // We need to use the public registry because in the local NPM server we don't have
+  // older versions @angular/cli packages which would cause `npm install` during `ng update` to fail.
+  try {
+    await setRegistry(false);
+
+    await useBuiltPackages();
+    await installWorkspacePackages();
+
+    // Update Angular CLI.
+    await ng('update', '@angular/cli', '--migrate-only', '--from=8');
+  } finally {
+    await setRegistry(true);
+  }
+
+  if (!getGlobalVariable('ci')) {
+    const testRegistry = getGlobalVariable('package-registry');
+    await writeFile('.npmrc', `registry=${testRegistry}`);
+  }
+
+  // Update Angular.
+  const extraUpdateArgs = await isPrereleaseCli() ? ['--next', '--force'] : [];
+  await ng('update', '@angular/core', ...extraUpdateArgs);
 
   // Use the packages we are building in this commit, and CI Chrome.
   await useBuiltPackages();
   await useCIChrome('./');
   await useCIChrome('./e2e/');
   await useCIDefaults('eight-project');
-  await installWorkspacePackages();
 
-  // Update Angular.
-  const extraUpdateArgs = await isPrereleaseCli() ? ['--next', '--force'] : [];
-  await ng('update', '@angular/core', ...extraUpdateArgs);
+  // This is needed as otherwise causes local modules not to override already present modules
+  await rimraf('node_modules/@angular-devkit');
+  await rimraf('node_modules/@angular/cli');
+
+  await installWorkspacePackages();
 
   // Run CLI commands.
   await ng('generate', 'component', 'my-comp');
diff --git a/tests/legacy-cli/e2e/utils/packages.ts b/tests/legacy-cli/e2e/utils/packages.ts
index e51ffa961d16..a8416c9ae24c 100644
--- a/tests/legacy-cli/e2e/utils/packages.ts
+++ b/tests/legacy-cli/e2e/utils/packages.ts
@@ -1,5 +1,6 @@
 import { getGlobalVariable } from './env';
-import { ProcessOutput, silentNpm, silentYarn } from './process';
+import { writeFile } from './fs';
+import { ProcessOutput, npm, silentNpm, silentYarn } from './process';
 
 export function getActivePackageManager(): 'npm' | 'yarn' {
   const value = getGlobalVariable('package-manager');
@@ -39,3 +40,21 @@ export async function uninstallPackage(name: string): Promise<ProcessOutput> {
       return silentYarn('remove', name);
   }
 }
+
+export async function setRegistry(useTestRegistry: boolean): Promise<void> {
+  const url = useTestRegistry
+    ? getGlobalVariable('package-registry')
+    : 'https://registry.npmjs.org';
+
+  const isCI = getGlobalVariable('ci');
+
+  // Ensure local test registry is used when outside a project
+  if (isCI) {
+    // Safe to set a user configuration on CI
+    await npm('config', 'set', 'registry', url);
+  } else {
+    // Yarn does not use the environment variable so an .npmrc file is also required
+    await writeFile('.npmrc', `registry=${url}`);
+    process.env['NPM_CONFIG_REGISTRY'] = url;
+  }
+}